Tag: car

Over the last decade, Brazil has become fertile source for creativity and disruptive business models. The innovation revolution is alive both among start-ups and among the thousands of Brazilian multinationals. A new report from INSEAD and the OECD Development Centre argues that by developing new business models, “in several revealing cases, Brazilian businesses are redefining global business”.

Bug Agentes Biológicos mass-produces wasps to combat larvae and stinkbugs that threaten sugarcane and soybean plants, two of Brazil’s largest cash crops. This past year, Bug perfected a way to spray its wasps onto soy fields, just as pesticides are spread via airplane. “We can liberate the insects in the right dose, at the right speed, and with the right protection so they can be effective,” says Francisco Jardim, a Brazilian VC who has invested in Bug and sits on its board. Wasps, for example, need to be protected until their wings grow big enough for flight, or else ants present a threat. (Isn’t nature grand?)

Bug’s timing feels right. Brazil is the world’s third-largest agricultural exporter (behind the United States and EU); it recently passed the U.S. as the largest consumer of pesticides. Yet the country has begun to phase out the more noxious chemical pesticides Brazilian farmers use despite diminishing effectiveness. Bug has the only alternative approved by Brazilian agricultural, health, and environmental ministries. It’s currently at 100% capacity with plans in 2012 to double the acreage it covers.

The boo-box is the largest Internet advertising technology in Latin America. An ad network that offers innovative solutions targeting technology and different formats of advertisements for the web. In their network appears around 3 billion ads per month. Boo-box has more than 40,000 affiliate publishers that produce content every day on their blogs, websites and social network profiles. The subjects dealt with by our publishers are the most diverse, for all tastes and audiences: automotive, beauty, food, health, tourism, and more. There are 310,000 websites and blogs in total, and 23 000 profiles Twitter! All this great content attracts audience: more than 80 million people per month, equivalent to 100% of Internet users in Brazil. People interested in staying on top of all that is happening on the internet and the world. technology of boo-box bridges the gap between advertisers who want to communicate with this audience, and publishers that offer advertising space on their websites and blogs.

The Brazilian advertising network exploded last year, quintupling the number of ads it placed to reach some 80% of its home country’s web users. The key, says founder Marco Gomes, is creating novel ad formats “where people are already paying attention,” such as in Twitter feeds or blog text. Next up: targeting all of Latin America. “There’s a lot of room to grow,” says Gomes, citing a recent merger with Argentine semantics firm Popego. “The car isn’t the center of our culture anymore, it’s the computer.

3 – EBX

For bringing fresh dirt. Brazil’s march toward self-sufficiency got an extra push from EBX this year. Grupo EBX’s Acu Superport, originally dreamed up as a “highway” to send raw goods to China, will now include a compound capable of holding 3 million tons of nitrogen-enriched fertilizer a year. Acu’s infrastructure can shuttle the resource to Brazil’s three major regions responsible for 87% of the country’s agricultural output.

For going where the clients are. Brazil’s largest IT services company cemented its global presence by expanding further into fellow emerging economy and outsourcing powerhouse, China. Stefanini also has designs on making inroads in Japan: Its new software development center is located in Jilin , a city in China that has a large Japanese-speaking population.

For serving and protecting its country. New ventures into defense and security will pay off for the world’s fourth-largest aircraft manufacturer and its home country. Embraer has its eyes set on building Brazil’s first geostationary satellite, a move that will boost the country’s communication, remote imaging, and weather prediction capabilities.

Petrobras has operations in the entire oil and gas productive chain and in the production of biofuels and of other alternative energy sources.

Petrobras recently made the biggest oil discoveries in Brazil in the pre-salt layer located between the states of Santa Catarina and Espírito Santo, where major volumes of light oil were found.

The first results indicate very large volumes. Just to have an idea, the Tupi accumulation alone, located in the Santos Basin, has recoverable volumes estimated at 5 to 8 billion barrels of oil equivalent (oil plus gas). Meanwhile, the Guará well, also in the Santos Basin, holds 1.1 to 2 billion barrels of light oil and natural gas.

For shoring up innovation in the Gulf of Mexico, post-Deepwater Horizon. This year, Petrobras received long-awaited U.S. Interior regulatory approval for the first floating deepwater oil and natural gas production and storage facility in the Gulf, positioning it to lead other energy companies toward what’s being billed as a safe new way to tap into natural resources. Located 165 miles off the Louisiana coastline, Petrobras’ Chinook-Cascade facility’s mobility makes it stand out from typical fixed platform sites; it can be unhooked and moved out of the path of hurricanes to avoid long-term oil shortages. The project has 600,000 barrels of oil storage capacity and can process 80,000 barrels per day.

For opening the app marketplace to web developers. São Paulo-based Predicta launched SiteApps in April 2011 as a platform for easy-to-use website optimization. Developers can post their free or paid apps on the site; users can then install the tool (from analytics to social media widgets) onto their websites.

For defining the way Brazil does local. Apontador has long moved away from its mapping roots to become the top geolocation service company in Brazil. In 2011 it rolled out Apontador+, a feature that lets businesses create pages on the site to see how Apontador users (more than 12 million a month) interact with their brand.

For bringing radio to gaming. Fresh from a copyright infringement settlement with Zynga, Vostu soldiers on as the first company to incorporate radio into its social gaming. Users can now hear Brazilian pop hits and gaming advice instead of canned music and sound effects while building farms and cities on its popular games MiniFazenda and MegaCity. Listeners can also earn rewards by completing in-game missions promoted on the station.

As expected more and more countries are lining up to challenge the unreasonable protective measure by the Brazilian government to increase the Tax on Industrialised Products (IPI). Last month, Brazil raised the so-called IPI by 30 percentage points for imported cars that aren’t made with at least 65% local content. Excluded are those from companies that produce locally or in Mercosul partners. Established carmakers such as Volkswagen, Fiat,General Motors Co. and Ford, which together account for about three-fourths of car sales, had complained about the influx of cars as Brazil’s currency strengthened and demand jumped.

Japan may be the first country to challenge at the World Trade Organization the Brazilian this increase in the IPI tax. In addition to Japan, South Korea also objected to the increase for imported cars decided by the Brazilian government. The two countries that are producers of automobiles, said that Brazil violates the agreement of trade-related investments as well as an article of the World Trade Organization (WTO) on national treatment of companies.

Both Korea and Japan has decided to challenge the measure of the Brazilian government in the Market Access Committee , which periodically examines new barriers raised by the countries. The report itself noted that the Japanese action could pave the way for other governments complain of Brazil, as it did. Japan will ask judges at the WTO to examine the measure. Though most Japanese car makers produce locally, exempting them from the tax, the country’s government is concerned that a similar measure could be repeated by other countries. The issue was raised with Brazil during a meeting of the WTO’s market access committee on Friday, said Atsushi Saito, Japan’s representative at the Geneva-based organization. In addition to Japan, members from South Korea, Australia, Europe and the U.S. also voiced their concerns, Saito said. When asked if Japan planned to file a formal complain with the WTO, Saito replied in an email that “If you understand that ‘formal complaint’ is part of a dispute settlement process, we don’t have any plans at this stage.”

More than 20% of cars sold this year are imported, up from just 5% in 2005, according to automakers association Anfavea. But the tax hike was challenged by car companies who are building or plan to build factories in the country and who say that because they won’t be able to meet the full local content requirements during the first few years of operations, they would cancel plans to bring production onshore.

Government willing to negotiate?

The government has since said it would negotiate with those companies to reach a compromise. This is also confirmed by China’s JAC Motors. JAC Brazil says it has finalized a deal to build a $500 million car factory in Brazil. JAC Brazil says in an emailed release the factory will be built in the northeastern state of Bahia. The plant should be ready by 2014.The automaker said in August it wanted to build a factory in Brazil. But those plans were questioned after Brazil hiked the import taxes on foreign cars, threatening the Chinese-made vehicles JAC ships to Brazil. JAC says in its Friday statement it hopes the decision to invest will convince officials to scrap that tax hike.

BMW considers building a factory in the country, but..

BMW asked Brazil’s Trade and Development Minister Fernando Pimentel to reevaluate the increase in the IPI tax as it considers building a factory in the country, O Estado de S. Paulo reported, citing Henning Dornbusch, chief executive officer of BMW’s Brazil unit. The Brazilian government’s decision to raise the tax on cars with less than 65 percent of their parts produced in Brazil may lead BMW to build its plant in China, India or Russia instead, according to the newspaper. The company will announce its decision by November, O Estado said. The Ministry of Trade and Development’s press office said Pimentel hasn’t made any commitment relating to BMW’s request because the decision must be made in conjunction with Finance Minister Guido Mantega, O Estado said.

SÃO PAULO—Anhui Jianghuai Automobile Co., the Chinese auto maker known as JAC, and its Brazilian partner said Friday that they decided to go ahead with plans to build a factory in Brazil on hopes that the government will modify a production tax.

SHC, the company that imports JAC automobiles into Brazil, said it would invest 80% of the 900 million Brazilian reals ($509 million) needed to build the factory, with JAC providing the rest. The factory will be built in the northeastern Brazilian state of Bahia, with output set to begin in 2014.

Brazil’s market—the world’s fourth-largest by sales—has attracted heavy investment. Sales are expected to grow 5% this year, slowing from last year’s 12% expansion as the government raised interest rates earlier this year to rein in an overheated economy.

The JAC factory, with initial capacity of 100,000 vehicles, will be in the city of Camacari, an industrial area where Ford Motor Co. has a plant. JAC will assemble and paint the cars locally, with stamping and motor-production capacity set to be built later.

JAC began selling cars in Brazil in March of this year, and through September had sold 17,421 vehicles. With four models sold locally, JAC accounts for 0.9% of all cars sold this year, according to auto dealers association Fenabrave.

SHC and JAC will also build a research center to locally develop parts such as flex-fuel engines–the predominant kind in Brazil, which can run on gasoline, ethanol, or a mixture of the two–as well as a design center and a test track.

The factory plans had been announced in August by SHC president Sergio Habib, although a location had yet to be decided upon. A month later, however, Brazil said it was raising the a tax on autos by 30 percentage points—to a range of 37% to 55%, from 7% to 25%—exempting only cars that used at least 65% locally produced content.

Mr. Habib said last month that the tax would also hurt auto makers that in recent months had begun building factories in Brazil, such as South Korea’s Hyundai Motor Co. and China’s Chery Automobile Co. Mr. Habib later said he may cancel plans to build the factory because it was impossible for any company to begin production with 65% local content.

Brazil’s Trade Ministry said earlier this week that it was considering making the rules more flexible. News reports said the government may consider gradually increasing local content requirements for newly installed factories.

Also Friday, Mr. Habib said Friday that he is in talks with India’s Tata Motors to import the company’s cars. Tata officials weren’t available to comment.

One of the automakers hardest hit by the protective measure of the Dilma administration, the increase in the IPI (Excise Tax), China’s JAC Motors accused Brazil of breaching the guidelines of the WTO (World Trade Organization) and confirmed that it has frozen its plans to open a factory in the country.

“The way in which the Brazilian government raised the tax is a serious violation of the basic principles of the WTO,” said JAC Motors, in a written response to Folha.

“The discontinuous, irrational and partial Brazilian policy strongly undermined the confidence of JAC and other automakers to invest in Brazil. Therefore JAC is forced to re-evaluate its decision to invest in Brazil,” the company said.

The Chinese automaker says that the measure did not forecast an adjustment period and cites three alleged violations of Brazil to the general guidelines of the WTO: market access, fair competition and non-discrimination.

In JAC’s judgment, Brazil adopted the measure looking to limit Chinese cars, compromising fair competition. The company says that it functions without subsidies from the Chinese government and has not been accused of dumping (charging artificially low prices).

“The Brazilian government offered special treatment to Mercosul and other countries (Mexico) to the detriment of China, breaking the principle of MFN (Most Favored Nation),” the Chinese automaker says.

MFN, taken by the WTO as one of the most important guidelines for international trade, states that in normal situations, one cannot differentiate between trading partners.

$600 MILLION FACTORY

JAC also mentions that the increase in the IPI differentiates between domestic and imported products, in violation of the principle of “national treatment” whereby imported products must have the same conditions of local competition after already entering the domestic market. The directive allows customs duties which is not the case of the IPI.

Representatives of JAC met on Tuesday with the Commerce Ministry to pressure the Chinese government to act on behalf of the company. But until yesterday there was no official statement on the issue.

At the beginning of August, JAC had announced the construction of a factory in Brazil, which would start production in 2014. The planned investment was $600 million to produce 100 thousand units per year. According to the company, this would generate 3500 jobs directly and another 10,000 indirectly.

JAC is a Chinese company that sold the most cars in Brazil this year – about 14.5 thousand.

Founded in 1964, the China Anhui Jianghuai Automobile Company is headquartered in the city of Hefei (east). Last year, it sold 460 thousand units, earning 50% more than in 2009.

Protectionism all over the place: Brazil is closing its doors

In another attempt protecting the labour market, Brazil has raised the minimum capital requirements for granting permanent Director’s Visas in Brazil. In the past it was possible to obtain a permanent visa for intra-company transferees to work as managers, directors, or executives with a minimum investment of US$200.000. From now on, companies have to invest at least R$ 600.000 in order to obtain a visa for its foreign directors who are coming to live in Brazil. Each additional director will require another R$600.000.

On this blog I have already given other examples of protectionism by the Brazilian government. Just a few days ago I wrote an article about the massive tax increase (+30%) on imported cars. Also the wind-energy industry is experiencing the measurements to protect the local (monopolist) steel industry.

Although the increased capital requirements and the additional option to get visa for foreign managers will provide additional revenue for Brazil government and facilitate the creation of jobs in the country, they could add further stress on the already tight labour market particularly for qualified labour and possibly discourage long term productive foreign direct investments in Brazil vis-a-vis other similar foreign direct investment destinations with a more favourable legislation on foreign labour.

Again, this looks like another time the Brazilian government is shooting in its own foot.

The government will more than doubled the IPI (Tax on Industrialized Products) for domestic and imported vehicles that do not meet requirements such as investments in technology and a percentage of 65% domestic produced materials.

Because of a common automotive regime between Brazil and Argentina, automakers operating in the neighboring country and sold to the Brazilian market will also be affected. The announcement was made Thursday by the Ministers Guido Mantega (Finance), Fernando Pimentel (Development) and Mercadante (Science and Technology).

According to Mantega, the measure can leave cars 25% to 28% more expensive than today. The government says the measure will impact on car prices by up to two months.

This Maserati will be around 30% more expensive after the new implementation of the higher taxes on imports

Currently, the tax rates of the cars produced in Brazil range from 7% to 25% depending on the model and power the car. The new rate will increase by 30 percentage points, from 37% to 55% depending on engine capacity. For cars up to 1,000 cc, the IPI will rise from 7% to 37%. For vehicles from 1000 to 2000 cc, the rate, currently between 11% and 13%, will rise to 41% to 43%. In addition to passenger cars, the measure will include the manufacture of tractors, buses, trucks and light commercial vehicles.

NATIONAL PRODUCTION

To maintain the current rate and avoid the increase, automakers must prove they aare manufacturing cars with a least 65% domestic produced materials and that they have centers of technological development in Brazil. In 60 days, the Ministry of Development, Industry and Foreign Trade will check the qualifications of companies that meet the requirements and will not have tax increase. In addition, companies will have 15 months to maintain or expand their investments in technology.

The measurement will be in effect until December 2012 and is part of the plan to stimulate the industry ‘Brasil Maior’, announced last month by President Rousseff.

COMPETITIVENESS

The objective of the measure is to foster competitiveness in Brazil, and make the vehicles manufactured in the country have more local content. The government hopes thereby to stimulate production in the country one of the ways to generate more employment in the country. “It’s a complementary program of “Brazil Maior” to compete more solid with the import cars by means of stimuli for the Brazilian industry, one that produces vehicles in Brazil and Argentina,” said Mantega.

“It has happened that the market is depleted, the crisis has reduced consumption. There is excess capacity and a greater competition for markets. Brazil has maintained high sales, re-established after the 2008 crisis of production and consumption. But there is an appropriation that by international manufacturers, “he said.

The minister said the goal is to prevent the export of manufacturing jobs. “We run the risk of being exporting jobs to other countries. We were concerned with the increase of vehicles in stock. Industry is innovation, creates jobs and the market should be enjoyed by the domestic industry,” said Mantega.